Assembly line of engines for the Ford KA 1.0 3 cylinders at the Ford Engines plant in Camaçari, Brazil.
Paulo Fridman | Corbis News | Getty Images
Ford Motor is ending vehicle production in Brazil under a restructuring of its South American operations. The actions, including closing three plants, are expected to result in $4.1 billion in pretax charges, Ford said Monday.
The automaker said it will record about $2.5 billion in cash charges, primarily in 2021, for employee separation, termination, settlement and other payments. In addition, it will post about $1.6 billion in non-cash write-offs for tax receivables and accelerated depreciation and amortization.
Ford has operated in Brazil for more than a century, however, the region and operations have been unstable in recent years.
Ford is actively evaluating and restructuring its global operations, including those in South America, as it attempts to execute an $11 billion turnaround plan. Ford is hoping to boost profitability by achieving an 8% adjusted EBIT margin and generate consistently strong adjusted free cash flow.
Production will cease immediately at its Camacari and Taubate plants in Brazil, however, some parts production will continue for a few months to support aftermarket sales inventories, Ford said. Another plant in Horizonte, Brazil, will continue to operate until the fourth quarter. About 5,000 employees are expected to be impacted.
This is a breaking news story. Please check back for updates.
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This article originally appeared on www.cnbc.com
